Obamacare's Next Big Test Comes New Year's Day

(Reuters) - New Year's Day will bring a fresh test for President Barack Obama's healthcare overhaul, as hundreds of thousands of Americans will begin to use the program's new medical coverage for the first time.

For the nation's healthcare system as well as its politics, the stakes are huge in Wednesday's launch of the program known as Obamacare.

For anxious Democrats with an eye on the 2014 congressional elections, it is a chance for the Obama administration to rebound from the disastrous rollout of the website that enrolls people in private coverage through the program - and show that the White House's effort to help millions of uninsured and underinsured Americans is finally gaining its footing.

Or, as Republican congressman Fred Upton and other critics of Obamacare warned in recent days, Wednesday could represent the beginning of another debacle that fuels Republicans' push to make dissatisfaction with Obamacare the chief issue in the November elections.

More immediately, the question is whether the program will work as advertised on January 1, after a chaotic enrollment period in which problems with the HealthCare.gov website led to a series of deadline extensions and undermined public support for Obamacare and the president.

The White House said early Sunday that about 1.1 million people have enrolled in coverage plans through the federally run HealthCare.gov, which covers 36 states. That figure does not include the latest enrollment data from 14 states that run their own healthcare enrollment sites - including California, Connecticut, Kentucky, New Yorkand Connecticut - and where response to Obamacare has been enthusiastic, so the total enrollment nationally is likely more than 1.5 million.

That is well short of the 3.3 million enrollees administration officials were hoping for by now, but it represents a dramatic improvement from a month ago, when barely 150,000 had signed up because of a series of technical problems with the HealthCare.gov site.

Many of the newly insured under the Patient Protection and Affordable Care Act - about 975,000 on the federally run exchange - signed up just ahead of a deadline on December 24 to receive benefits on January 1, giving health insurers a tight framework to create accounts that can be accessed by doctors.

One fear, as expressed by administration officials and insurance industry executives, is that some people who need medical care during the first days of 2014 will head to the doctor, only to find there is no record of their new insurance.

That could mean patients would have to pay upfront and submit a bill to their insurance carriers later.

And even though the Obamacare program is not directly responsible for the private insurance purchased through its online exchanges, White House officials have acknowledged that any early problems with the coverage are likely to reflect on the administration.

Some insurance executives say that even a few stories of coverage problems during the next few weeks - which seems inevitable when dealing with such a massive program - could damage the reputations of the White House and the healthcare overhaul.

"The big moment of trust is 12:01 a.m. on January 1st, when a mother is standing in a pharmacy with a baby in her arms trying to get a script filled," Aetna Inc Chief Executive Mark Bertolini said this month. "Getting that information right so that we don't have these events which ultimately end up in our lap if we don't do them well, it's very important for us all to get it right."

A senior administration official acknowledged that "there will be bumps in the road."

"We need to plan for them, we need to anticipate and we need to make sure that we are ready to respond," the official said.

Physicians say they are used to dealing with changes to patients' insurance coverage and it is not unusual for there to be lag times between enrolling in a new insurance policy and the time it becomes official.

Some doctors will be willing to delay billing. Others may not be.

"Come the start of the year there will be dueling narratives: the people who have never had insurance before who are actually getting decent care for the first time in their lives, and people who are having issues with the administration's new policies," said Dan Mendelson, chief executive of Avalere Health, which has been tracking the healthcare overhaul.

"They are going to kind of cancel each other out," he predicted. "Three months from now when we are in the electoral cycle, the policies will be judged on the basis of enrollment (numbers), rather than any technical problems."

Mendelson expects the early 2014 problems to be limited given the light pace of enrollment spread out across the nation, and the fact that hospitals and other providers are experienced in troubleshooting coverage questions for patients.

'WE CONTINUE TO HOLD OUR BREATH'

Stories of patients with Obamacare plans who were turned away or asked to pay higher-than-expected medical fees upfront because of technical or administrative delays within the program would help the case of Republicans and other foes of the law.

During the past week, Republicans signaled that they will be closely watching what happens with Obamacare enrollees who seek medical care during the first several days of the new year.

"We continue to hold our breath with the next shoe to drop," said Upton, a Michigan Republican who is leading a charge in the House of Representatives against Obamacare.

"When folks visit their doctor or take a child to get necessary treatment (this) week, will the services actually be available? The consequences of the administration's incompetence could not be greater," Upton said.

Some Democrats, including House Minority Leader Nancy Pelosi of California, see the start of Obamacare coverage on January 1 as a turning point for the program that will work in Democrats' favor and reverse polling trends against Obama and his party.

"By the time we get into the spring, I think the Affordable Care Act will either be a (political) wash or a plus for Democrats," Pelosi told reporters last week.

As many as 7 million people had been expected to sign up for Obamacare coverage when the 2014 enrollment period ends on March 31, but that estimate has been thrown into doubt because of the program's error-plagued rollout.

GETTING IT RIGHT

The Obama administration and several of the state-run exchanges have urged consumers to call up their new insurance plans to make sure they are covered.

The administration and several states have offered their call-center personnel to assist in cases in which there are problems with enrollments.

Late last week, the U.S. government indicated that it was ready to respond to any stories of distressed patients who emerge beginning this week.

The administration said it has set up contacts at all of the health plans working in the federal marketplace to "have a mechanism to address the issue (and) ... make sure that it can be resolved as quickly as possible."

Doctor groups said they were confident their current systems for handling patients who need help clarifying insurance coverage would make sure people receive needed care.

"Whenever a patient changes an insurance company or plan there is a period of adjustment," said Dr Richard Schilsky, chief medical officer with the American Society of Clinical Oncology.

While there may be a period of limbo for some people between signing up and the insurance taking effect, unless there is a medical emergency, patients probably will be able to wait a week or so to see a doctor, Schilsky said.

"If someone needs care, they will get it," he said.

Dr Charles Cutler, chair of the Board of Regents of the American College of Physicians, said many fellow experts in internal medicine who treat people for chronic disease would not be concerned if it took several weeks to get insurance information for a patient.

"In my practice we assume people are honest," said Cutler, whose practice is in suburban Philadelphia. "If they say they have signed up but are not in the system, we will get it straightened out."

(Reporting by Toni Clarke in Boston and Michele Gershberg in New York; Additional reporting by Roberta Rampton in Washington; Editing by David Lindsey, Vicki Allen and Eric Beech)